EU Wheat Close

24/01/11 -- EU wheat closed mostly higher with March London wheat up GBP2.25 at GBP201.00/tonne, and new crop Nov GBP0.50 higher at GBP172.50/tonne. March Paris wheat rose EUR1.75 to EUR261.25/tonne and Nov fell EUR0.75 to EUR229.00/tonne.

In London new crop Nov set a new contract high of GBP173.50, in Paris old crop March did likewise hitting EUR263.75/tonne. The Mar/Nov London spread is GBP28.50/tonne, broadly similar to that in Paris.

London wheat gained relative to Paris as the pound weakened against the euro, falling below 1.17 at one point.

The UK continues to export wheat, and seems highly likely to go well over 2 MMT this season - 2.3/2.4 MMT would be my guess, which would be a million tonnes more than Defra currently estimate.

Many trade pundits estimate that maybe 10% of the UK crop still has to be sold ex-farm - around 1.5 MMT. Other talk suggests that maybe 30% of new crop has already been sold.

Tunisia bought 100,000 MT of optional origin hard wheat again on Friday, and Algeria are back in the market tendering for wheat again today too, having already supposedly bought somewhere in the region of 600 TMT- 1 MMT in the past few weeks.

Nearby Feb Paris rapeseed fell sharply late in the day, closing EUR11.75/tonne lower at EUR503.00/tonne on talk that price finally is rationing demand. Reports suggest that OSR is now so expensive that it is more economical for the large fuel companies to fail to meet their biodiesel blending obligations and pay the fine instead than meet EU-imposed mandatory levels of inclusion.